Hilton Worldwide T/A Hilton Brisbane v Mrs Farjana Haque

[2015] FWC 263

[2015] FWC 263

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.120 - Application to vary redundancy pay for other employment or incapacity to pay

Hilton Worldwide T/A Hilton Brisbane
v
Mrs Farjana Haque
(C2014/4940)

COMMISSIONER SPENCER BRISBANE, 13 JANUARY 2015

Variation of redundancy pay.

[1] This decision relates an application filed pursuant to s.120 of the Fair Work Act 2009 (Cth) (the Act). The application was made by Hilton Worldwide T/A Hilton Brisbane (the Applicant).

[2] The Applicant has applied to the Fair Work Commission (the Commission) seeking that the redundancy entitlements of Mrs Farjana Haque (the Respondent) be reduced to nil.

[3] The Applicant has made the claims on that basis that the Applicant submits that it has obtained other acceptable employment for the Respondent.

[4] Directions were issued for the filing of material in the application. The parties were directed to ensure that their submissions included submissions in relation to whether the matter should proceed by way of formal hearing or determination on the papers. Neither party requested a formal hearing in the matter. The Respondent did not file any material in relation to the application. The Applicant did not address the issue of whether the matter should proceed by way of formal hearing or determination on the papers. On the basis of the nature of the application and the material filed in the matter by the Applicant, the Commission determined that the matter could efficiently be determined on the papers.

[5] While not all submissions and evidence filed in this matter have been referred to, all of such have been considered.

[6] This matter was considered at the same time as four separate applications which arise from the same changes to employment. A conference was held before the Commission but the Respondent to this matter did not attend. The Commission has issued separate decisions on the basis that the Respondents have filed material separately in relation to the applications, and in this matter, not at all. There is a significant overlap in the circumstances and consideration in all matters. The decisions reflect these similarities, however each matter has been considered on the basis of the submissions and evidence of the parties as well as the findings and consideration of the Commission in each matter.

Background

[7] The Respondent was employed full-time working 38 hours per week as a laundry attendant at the Applicant’s Brisbane hotel. The application indicated that the Respondent had worked for the Applicant for a period of 2 years. The Applicant later stated that the Respondent has worked for the Applicant since 9 January 2012.

[8] The Respondent was offered a permanent-part time position working 112 hours per 4 week cycle (an average of 28 hours per week). The Respondent signed a Letter of Offer for this permanent part-time position which came into effect some days later.

Relevant legislation and award clauses

[9] The National Employment Standards (NES) prescribe the minimum entitlements to redundancy pay pursuant to s.119 of the Act:

119 Redundancy pay

Entitlement to redundancy pay

(1) An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:

(a) at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or

(b) because of the insolvency or bankruptcy of the employer.

Note: Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.

Amount of redundancy pay

(2) The amount of the redundancy pay equals the total amount payable to the employee for the redundancy pay period worked out using the following table at the employee’s base rate of pay for his or her ordinary hours of work:

Redundancy pay period
Employee’s period of continuous service with the employer on termination	Redundancy pay period
1	At least 1 year but less than 2 years	4 weeks
2	At least 2 years but less than 3 years	6 weeks
3	At least 3 years but less than 4 years	7 weeks
4	At least 4 years but less than 5 years	8 weeks
5	At least 5 years but less than 6 years	10 weeks
6	At least 6 years but less than 7 years	11 weeks
7	At least 7 years but less than 8 years	13 weeks
8	At least 8 years but less than 9 years	14 weeks
9	At least 9 years but less than 10 years	16 weeks
10	At least 10 years	12 weeks

[10] The application has been made pursuant to s.120 of the Act which provides:

120 Variation of redundancy pay for other employment or incapacity to pay

(1) This section applies if:

(a) an employee is entitled to be paid an amount of redundancy pay by the employer because of section 119; and

(b) the employer:

(i) obtains other acceptable employment for the employee; or

(ii) cannot pay the amount.

(2) On application by the employer, the FWC may determine that the amount of redundancy pay is reduced to a specified amount (which may be nil) that the FWC considers appropriate.

(3) The amount of redundancy pay to which the employee is entitled under section 119 is the reduced amount specified in the determination.

[11] The Applicant specifically relies upon s.120(1)(b)(i).

[12] The Applicant submitted that the Hilton Brisbane Enterprise Agreement 2010 (the Agreement) covered and applied to the employment of the Respondent. Clause 6.3 of the Agreement provides that redundancy pay is provided for in the NES.

Applicant’s submissions and evidence

[13] The Commission issued Directions to the parties regarding the filing of submissions and evidence relating to the application. The Applicant filed a Letter of Offer signed by the Respondent. The Respondent did not file any material and accordingly, the Applicant did not provide any material in reply. However, the Applicant later filed further material including the commencement date and entitlement to redundancy pay of the Respondent.

[14] The Applicant indicated in the applications that the Applicant had obtained acceptable employment for the Respondent in the form of a permanent-part time position working 28 hours per week. The Applicant has made limited submissions regarding s.120(1)(b)(i) of the Act and how such employment was “acceptable” employment.

[15] The Applicant indicated in the application that the amount of redundancy owing in total for the Respondent was two weeks. However, the Applicant later submitted that the Respondent’s entitlement to redundancy payment is 6 weeks.

[16] In justifying, on a business case, the redundancies, the Applicant stated that occupancy levels in the hotel have been at reduced levels and therefore it had been necessary to reduce employment across relevant departments.

Respondent’s submissions and evidence

[17] The Respondent filed no material in relation to the application and did not attend the conference.

Consideration

[18] An application pursuant to s.120 has multiple elements of which the Commission must be satisfied prior to issuing an Order.

[19] Firstly, the wording of the section is that an entitlement to redundancy pay must exist in order for the Commission to vary that redundancy pay entitlement. The Commission has previously held that in order for s.120 of the Act to have any application there must first be an entitlement to redundancy pay pursuant to s.119 of the Act. 1 Further it was held in that matter that where there is no entitlement under s.119 there can be no order to reduce the “entitlement” pursuant to s.120.2

[20] It is noted that the period of service for the Respondent was stated as 2 years on the application; however, the application also states that the Respondent’s entitlement to redundancy is 2 weeks. The Applicant later provided the commencement date of the Respondent and stated that the entitlement to redundancy is 6 weeks. Under s.119 of the Act, a period of 2 to 3 years service corresponds with an entitlement to redundancy pay of 6 weeks. No material has been filed by the Respondent which indicates the entitlement to redundancy pay is disputed. It is sufficient for the purposes of this decision that both parties accept, and the Commission is satisfied, that the Respondent has an entitlement to redundancy pay, pursuant to s.119 of the Act, subject to any order that the Commission may make.

[21] Employees are entitled to redundancy pay pursuant to the provisions of the Act, and s.119 relevantly provides that an employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour. I accept that the Respondent’s position of full-time laundry attendant was terminated at the employer’s initiative because they no longer required the job to be done by anyone. The full-time position was made redundant and the Respondent has an entitlement to redundancy pay.

[22] The critical issue is, on the material, should the Respondent forgo an entitlement to redundancy payment in circumstances where there the Respondent has continued to be employed by the Applicant, albeit with a reduction in hours by 10 hours per week.The onus rests solely on the Applicant to prove their case under either of the alternatives put in s.120.

[23] The Commission must consider the submissions and evidence regarding any alternate employment to enable the Commission to assess the “acceptable” nature of that employment. The Applicant made limited submissions in respect of the “acceptable” nature of the permanent part-time position. However, the Respondent accepted offer of employment with reduced hours.

[24] In the matter of Australian Chamber of Manufacturers v Derole Nominees Pty Ltd 3, the Full Bench found:

“What constitutes “acceptable alternative employment” is a matter to be determined, as we have said, on an objective basis. Alternative employment accepted by the employee (and its corollary, alternative employment acceptable to the employee) cannot be an appropriate application of the words because that meaning would give an employee an unreasonable and uncontrollable opportunity to reject the new employment in order to receive redundancy pay; the exemption provision would be without practical effect.

Yet, the use of the qualification “acceptable” is a clear indication that it is not any employment which complies but that which meets the relevant standard. In our opinion there are obvious elements of such a standard including the work being of a like nature, the location being not unreasonably distant; the pay arrangements complying with award requirements. There will probably be others.” 4

[25] In Clothing and Allied Trade Union of Australia v Hot Tuna Pty Ltd 5, the Full Bench found:

“...We do not propose to repeat here the thoroughly detailed argument presented by counsel for the union. A considerable part of that case was devoted to questions of onus and to supporting the proposition that the test of acceptability of the alternative employment is an objective one involving a consideration of such matters as pay levels, hours of work, seniority, fringe benefits, workload and speed, job security and other matters. It was argued that the failure of the employer to adduce evidence of such matters caused the company to fail to make out a case for an exemption. We have no doubt that there is an onus on the employer invoking cl 51(c) and that matters of the kind referred to by the union may be relevant in assessing the position in a particular case. We do not believe it to be necessary to make that examination in every case. Where an employee has accepted alternative employment in circumstances as those here, then in the absence of positive evidence going to the unacceptability of that employment, including unacceptable features of it, then the Commission is entitled to hold the employment as an acceptable alternative and relieve the employer of the obligation under cl 51(c) of the award. In this case, the evidence before the commissioner was that the five employees in question were given notice of the transfer with access to management to raise any difficulties involved and that there was no resort to this access.” 6

[26] It is clear that the Respondent accepted the alternative employment; the position as laundry attendant and the pay level is the same, while, on the evidence, the hours of work have changed. Objectively, a reduction in 10 hours of work per week results in a lower income for the Respondent.

[27] Despite the fact that the Respondent accepted the alternative employment, given the reduction in hours of work (while all other conditions remain the same), this does not constitute acceptable alternative employment. The Applicant has not demonstrated that the alternative employment was acceptable pursuant to s.120(b)(i) of the Act (given the reduction in hours) to obviate their total obligation to pay redundancy.

[28] The reduction in hours would have an on-going negative financial impact on the Respondent.

[29] Accordingly, in all the circumstances, I am satisfied that, in accordance with s.120 (1)(b)(i) of the Act, I should exercise my discretion pursuant to s.120(2) of the Act and reduce the amount of redundancy pay on the basis that the alternative employment has been obtained by the Applicant but with a reduction in hours.

[30] An employee has an entitlement to 6 weeks redundancy for at least 2 years but less than 3 years service. I have exercised my discretion to reduce the amount to three (3) weeks redundancy payment (based on a 38 hour week at the base rate of pay at the date of the redundancy). This amount, less the appropriate tax, is payable within 14 days from the date of this Decision.

[31] I Order accordingly.

COMMISSIONER

 1   Application by CAE Australia Pty Ltd [2012] FWA 7992 per Watson VP at [13].

 2   Ibid; also refer M & S Dickson [2011] FWA 5206 per Lewin C.

 3 (1990) 140 IR 123.

 4 (1990) 140 IR 123 at pp128.

 5 (1988) 27 IR 226.

 6 (1988) 27 IR 226 at pp230 - 231.

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